The writing is certainly vividly evident on China’s wall – or at least in its 10-year energy development plan. The world’s second largest economy is pouring US$740 billion into renewable power sources and energy efficiency.
While global policy makers dither over complex carbon equations, China is mobilising its resources to take lucrative first mover’s stake in the rapidly expanding cleantech market. Already world leader in wind generation, it’s now also the biggest exporter of solar panels.
In terms of sheer scale, the investment is massive – but China is far from alone in its shift of economic focus. Korea is committing two percent of its GDP to greentech in coordinated push to be one of the top seven players in this space by 2013. Sweden is already earning $8 billion year from its cleantech exports, while in Denmark, exports of energy technology alone reached $15 billion in 2008. And in the US, California’s San Diego is leading the charge with cleantech cluster now 650 companies strong.
As the cleantech revolution takes hold around the globe, New Zealand – despite its ready-made “clean” brand – seems to be missing in action.
It’s not like we lack the know-how.
As one of few countries already running on 75 percent renewable energy, we should at least be able to claim the high ground on specialist advisory (as well as offering an attractive destination for multinationals keen to minimise their carbon footprint). Instead we’re being pipped at the post by smaller players like Iceland – now regarded as global leader in geothermal.
Nor is the innovation gene dormant.
NZ Trade and Enterprise recently identified some 220 New Zealand companies specialising in the cleantech space. We’re already doing some great stuff – like turning industrial waste into biofuel (LanzaTech), leading the world in biogas upgrading technology (Flotech), producing great medium-sized wind turbines (Windflow), exporting energy-efficient lighting (Energy Mad), building world-leading eco-buses (Designline), creating more efficient motors (Drive Technologies) or high-tech, lightweight engines (Duke). And we do still have market cred in geothermal (Mighty River Power).
But … we could be doing so much more.
A growing cadre of business leaders, entrepreneurs, scientists and strategists sees cleantech as our best-yet opportunity to grow New Zealand’s economy, build export income, increase our productivity, and boost per-capita income.
And if that’s not carrot enough – try the stick.
If we don’t wake up to either the strength or momentum of the global market shift to cleaner products, we run very real risk of eroding our existing clean-green branding, thereby undercutting the exports that are this country’s economic lifeline.
Soon we won’t have any green laurels on which to rest…
Is it too late?
Can we catch the CleanTech Express? Yes. All it requires is bit of joined-up thinking and clear strategic direction. The problem at the moment is that while Kiwis have cleantech capability, it is isolated, uncoordinated, short of support and lacking overall leadership.
It was this recognition that helped prompt the formation of high-powered business group that reads like the who’s who of NZ Inc achievement. People like Warehouse founder Sir Stephen Tindall, Air NZ’s Rob Fyfe (recipient of last year’s Deloitte/Management Executive of the Year award), ‘world-class’ winners like Geoff Ross (42 Below), and Phillip Mills (Les Mills International) all see gold in greentech.
The group’s members are increasingly concerned that New Zealand is falling off the pace in terms of shifting our economic priorities toward low-carbon future. Recently appointed spokesman for the 100% Plan group Duncan Stewart believes we need to get momentum going – and fast.
“The magnitude and breadth of cleantech uptake in offshore markets is astounding. Every day, billions are being poured into commercialisation, scaling and transforming these economies. New Zealand risks turning up to the party late, drunk and clutching sheep.”
That we seem to be buying into the bureaucratic inertia which has so far characterised global efforts at adapting to climate change is plain shortsighted. Forget complex carbon-counting exercises – just check out the business case, suggests Stewart.
“At its heart, cleantech represents fundamental global shift towards renewable energy production, resource efficiency and waste reduction – show me an economist prepared to argue against the long-term benefits of this.”
Rick Boven certainly wouldn’t. Head of local think tank The NZ Institute, he says even winning one percent share of market estimated to be worth over US$1.3 trillion by 2017 would represent sizable boost to our economy.
“There are huge opportunities and other countries are systematically going after these – with their governments guiding and assisting that process. We’re falling behind.”
There isn’t the sense of urgency there should be either about the opportunities represented by the cleantech shift – or the very real need for adaptation to changing world environment, adds Boven.
“All the evidence is that climate change is progressing faster than any of the models predict. I am in the minority who think this is very, very urgent issue.”
What we need
Should New Zealand’s Government help tilt the playing field? Based on what other countries are doing worldwide – the answer has to be ‘yes’. Okay – we’re ahead of the game in terms of regulation to put price on carbon, but that’s only part of the picture.
Complementary measures – whether incentives, regulation or clear strategic direction – are all needed to build the necessary momentum for responding to an economic shift that various commentators now regard as being on par with the industrial revolution.
And when you’re dealing with such broad-based, fundamental step change, the country can’t afford an ad-hoc approach. This is an opportunity that needs our best brain power and coordinated strategy, says one of the movers behind the 100% Plan, Phillip Mills.
“Our aim has been to get high-powered taskforce together to identify the gaps – to basically look at where our natural strengths lie, where the demands are overseas and to find the most effective way of incentivising New Zealand Inc to make the most of these opportunities. To get stuff like this happening, you have to tilt the playing field, it’s got to be government led…”
And the current Government seems inclined to agree. When Minister for Climate Change Nick Smith spoke to NZ Management in late August, he suggested decision around setting up public/private taskforce focused on cleantech opportunities was in the offing.
“It’s been openly mooted by myself and actively considered. It’s yet to go to Cabinet but it’s an idea I’ve been working on for number of months.”
The Government thinks there are “real opportunities for New Zealand in the cleantech space and is working on how we can best leverage that across primary industries, tourism and broader manufacturing and IT industries,” Smith says.
“Our immediate priority was getting the ETS [Emissions Trading Scheme] in place, but moving into cleantech is the next important step.”
According to Smith, the ETS has already put New Zealand on the front foot.
“The overwhelming message I get from business is that resolving the ETS has given New Zealand competitive advantage over Australia where there is complete political confusion over where they are going. Even some quite emission-intensive industries have made interesting signals regarding quite significant investment in New Zealand ahead of Australia simply because investment hates uncertainty. New Zealand has got itself into good space and we need to leverage from that…
“We do want to lead and ensure that New Zealand and New Zealand businesses are not caught lagging their competitors in cleantech issues.”
Smith says he’s been working closely on the issue with former